Questions: History of American Capitalism
1. Why is Alexander Hamilton considered one of the major architects of American Capitalism?
Alexander Hamilton was responsible for bringing about various developments in capitalism. For instance, he was responsible for proposing the establishment of a national bank. Then, he also encouraged the government to build infrastructure designed to foster development of industries. Hamilton supported the need for the establishment of a credit system. He also encouraged the idea of making investment attractive to investors as it was a key ingredient for the growth of the economy. He also foresaw the need for more investment in the industrial sector. Therefore, Hamilton contributed greatly to the American Capitalism and helped build the country. (Steele, 2004)
2. What impact did the Erie Canal have on American Capitalism in the early 19th century?
Erie Canal’s construction began in 1817 and got completed in 1825. It impacted American capitalism greatly through its numerous contributions to the economy. For instance, it facilitated the movement of bulky goods yet at the same time reducing the time it took to transport them. In addition, it led to the rapid movement of the population towards the west (Craver, 2008). The population surge resulted to the creation of employment opportunities as well as availing of affordable labour, increased trading activities and industrial growth. It was also responsible for making New York a major port.
3 What is a good explanation of why the South did not industrialize as fast as the North before the American Civil War?
Before the American Civil war, the South did not develop as much as the North due to many reasons. The South’s economic interests were not development oriented as compared to the interests of the North. For instance, the South was opposed to the raising of tariffs or taxes for its people. The outcome of such was an increased cost of manufacturing goods (McMurtry, 2013). The North on the other side was able to achieve its targets hence benefitted greatly. In addition to this, the North was more advantaged because it had five times more manufacturing industries than the south.
4. Describe one example of technological advancement and creative entrepreneurship involved with the expansion of the American railroads in the late 19th century.
During the 19th Century when railroads were expanding at a very high rate, many creative innovations came about. One of the most outstanding innovations was the creation of the cotton gin machine. Eli Whitney created Cotton gin, and it was meant to help in making work easier. The cotton gin was used in removing the cotton. While being operated by one person, it would significantly reduce the effort and time to clean the cotton. The invention also led to the need for the transportation of the harvested cotton from the firms to the industries and the ports whereby they were being exported. (Steele, 2004)
5. Impact of Progressive Movement on the country’s national banking system?
The Progressive movement was a reform movement which occurred between the years 1900 till 1920. It sought to eliminate the power of monopolies by government organizations, as well as major banks in America. It emphasized on the necessity for the government enable a friendly environment to get a decent salary. Progressive movement also promoted the rights of women and equality among the people (Roark & Roark, 2009). The banks were able to get increased funds because of the availability of money being saved by the people who were engaged in trade activities. The banks also started giving out loans at which were paid back with interest.
6. Discuss why American business became supportive of government regulation of the American economy in the early 20th century.
The business leaders and the political leaders began involving the government in the economic matters for several reasons. The change was because of the pressure that was put by other small businesses, labor unions and other firms (Fogel, Goldin & Rockoff, 1992). These unions began asking for interception of the government on their behalf in trade-related problems. Consequently, America’s business started to involve the government in its business matters for fairness. By involving the government, the competition was going to be stepped up, and the government was going to help fight corruption.
7. Describe two reasons why the Ford Motor Company lost control of the market in the 1930s
Ford Motor lost control in the 1930s because of producing many units than the demand that was available at that time. Therefore, it ended up incurring many costs than they had sold thus making many losses. Investors who had invested in Ford Motor Company started to panic hence ended up selling their shares. Consequently, the share prices dropped and the investors who had bought the shares lost their values in the company (Bak, 2003). Later, Ford Company got a bad publicity, and its customers lost their deposits in the company. Ford’s loss was also attributed to the negative comments he made on one of the articles published at that time whereby he blamed Jews for the problems that it was experiencing.
8. Describe two ways Alfred Sloan revolutionized the auto industry as head of General Motors.
During Sloan’s tenure at General Motors, he revolutionized the industry through his leadership styles. For instance, he introduced the idea of changing the styles of the models produced annually, and he fathered the concept of planned obsolescence. Secondly, Sloan revolutionized the motor vehicle industry through the introduction of varied prices for the different motor vehicle models (Heitmann, 2009). The reasoning behind this idea was to avoid creating competition between the similar brands. Consequently, the buyers were going to stick to the GM brand and would buy according to their individual financial capability.
9. How does one distinguish between the U frame and M frame in the organization structure of American Capitalism?
The unitary organizational form also known as u frame organizational structure advocated the vice president staff in the judiciary to report directly to the president. Ford company is famous for practicing this form of capitalism under Henry Ford as the president of the company. The U Form structure involves forming vertical and integrated organization that lies just below the president. The M form structure is different from U form structure in that it involves multidivisional that are independent in functions and are under a centralized office. The structure proved more efficient compared to Fords Unitary structure after the great recession of 1920s where Ford almost went bankrupt. M form structure is more efficient as it allows to serve a market that demands diverse products (Freyer, 2006).
10. What are two economic factors that came together to produce the perfect storm of the Great Depression?
In terms of economics, there are different factors that brought about the great depression. The first one was as a result of over-investment and under-consumption. Therefore, this caused the loss of confidence in people’s spending patterns and therefore most of them shunned investing in the exchange markets. The large amounts held at hand led to a rise in demand. Secondly, the depression could have just started as an ordinary recession (Wecter, 1948). Then a mistake of the monetary policy could have led to the deeper economic issues which caused the great depression. (Steele, 2004)
11. Describe two ways a brand can last a long time.
A brand can only last longer depend on the delivery of its promises to the buyers or users of that given product. Therefore, in order for a brand to last, it must strive to meet customer’s needs who use the product. Secondly, in order for a brand to last, it has to change or adjust to the changing needs of the consumers (Yohn, 2013). If, it does not adjust accordingly, then it will not last. Therefore, success in whether a brand lasts or not is mainly dependent on its ability to satisfy the needs and wants of customers. However, promotions and Public Relations campaigns are also a necessary tool to constantly remind the customers of the brand’s existence. (Singer, 1999)
12. Which of the Three R””s, do most economic historians believe was the most successful during the New Deal
Reform – Permanent programs to prevent another depression and protect citizens against economic disasters or problems. Reform is the most successful option compared to the other two Rs. The reason is due to the futuristic nature of the R. It deals more with doing things right the first time rather than being reactive. Therefore, in case an economic issue arises, it should be dealt with beforehand unlike the case of allowing the problem to happen and then try to sort it out after the damage has been done. (Singer, 1999)
13. Name three products the federal government rationed in World War II
During the World War II, the federal government cut on a lot of spending so as to help its citizens get more with less. Some of the goods that were rationed included: Tires, gas, meat, sugar among others. However, the voluntary rationing was not as successful as previously projected (Sparrow, 2011).
14. Describe two reasons the American economy following World War II experienced greater growth.
One of the reasons why America experienced a robust growth after world war two was because of its earlier experience of the great depression. The depressionimpacted the population growth rate due to the financial stress that most families were having at the moment. Therefore, the post-war economy proved to be favorable for most people. Then after the war, most families gave birth to children thus raising the population greatly within a short time (Koistinen, 2012). The need to feed a growing population as well as clothing them led to the manufacturers of baby products cashing in huge profits since there was a very high demand.
15. How did the Marshall Plan following World War II impact American Capitalism?
The Marshall Plan was a deliberate effort by America to rebuild Europe, and the war devastated regions. The aim of this efforts was to foster trade activities by opening up barriers. The whole plan was carried out between 1948 to 1952 after the World War II. Another reason for the plan was to built industries remaking of Europe so that trade could resume again.
16. Discuss three reasons why RCA lost control of the electronics’ market following the Second World War.
RCA lost control of electronics after the World war II because of some reasons. The first reason is that they faced competition from other manufacturers of colored television sets. The sales worsened to the point that they had to reduce their prices and carry out aggressive sales and marketing campaigns (Chandler, Hikino & Von Nordenflycht, 2001). RCA lost control for a while since its management had invested quite a lot of money into the manufacture of television sets. The sales were not as impressive to warrant total control of the electronics industry (Gordon, 1999).
17. Describe some of the marketing approaches taken by the Cola Industries following the 2nd World War.
Some of the marketing approaches by Cola industries after World War II involved the use of celebrities to advertise. In addition to that, coke competed through their use of soda vending machines. The other strategy that Coke applied at that time was the overall change of the ingredients so as to make it sweeter and tastier than Pepsi. They were competing with Pepsi in the same market (Donaton, 2004). Coke also changed the market focus by targeting their new drinks to younger customers. Their strategies worked well although in some cases they had negative results as some customers felt like they had been left off.
18. Why was New Coke such a marketing disaster?
The new Coke faced various challenges when it was being launched into the market. The first hurdle it faced was that the competing Pepsi drink took a colossal portion of the newspaper and advertised in many pages with a very provocative message which discouraged the advertising of the coca cola. The other challenge it faced was resentment from the old customers who had gotten used to the old regular Coke. These customers felt that Coke had not taken their interests at heart and that it had betrayed their loyalty (Shanes, 2011). The new coke did not succeed or hit the targets it was anticipated.
19. Provide two examples of how Ray Kroc applied a decentralized approach to the M frame organization of McDonalds.
Kroc highly encouraged franchises to try out new risky processes and new ways o doing things. He encouraged them to share the ideas with others. Even when they failed to succeed, they were not punished. They were free to act in any manner as long as it did not affect the quality of services offered.
The first strategy Kroc used proposing a small amount to pay for a franchise but in return, he wanted the franchises to meet all the McDonalds standards of quality. If the firm could not meet the agreed upon standards, the contract was not going to be renewed. In addition to this, any franchise that did not meet the standards set out by McDonalds wasinhibitted from openning another branch.
20. What are three professions within American Capitalism where women have made noticeable advancement in the last 20 years?
In the past 20 years, huge strides in different professions within the American Capitalism are attributed to women. The labour market has started to be more open to the embracing of female employees into the workplace. Consequently, this has resulted to the employment of women into some specific sectors of the economy whereby they have done very well. Some of the careers whereby women have greatly contributed include the banking profession (Gersemann, 2004). In addition, they have been contributing to the call center jobs, teaching and other service related sectors.
21. What is the significance of the Bayh-Dole Act of 1980 on the pharmaceutical industry?
The Bayh-Dole Act refers to a Patent law Amendment, which involves all matters intellectual property. More specifically it is about the intellectual property that arises from research that has been funded by the government. Initially before the Act, the ownership of all discoveries from the research which has been funded by federal government automatically transferred to the government (Schacht, 2003). The Act simply changed the ownership to belong to the smaller institution involved. In the pharmaceutical industry, the Act has encouraged more innovation and discovery of new medicine because there is a sense of personal ownership or reward.
22. Provide two examples of why the Monsanto Company has been attacked by environmental groups.
Monsato Company has been facing attacks from environmental groups due to the development of their technology that is alleged to have brought about serious negative consequences. For instance, it has developed a technology called terminator technology that makes seeds coming from the first years planting sterile. The technology is ill-conceived as it aims to remove the traditional ways of saving seed. Therefore, their technology is uneconomical to the farmers. Another reason is that of their controversial roundup ready technology whereby certain crops that have been genetically engineered must use only one specific herbicide which has been manufactured by Monsato (Lefko, 2002). The soya beans which rely on these herbicides are highly dependent on the herbicides.
23. Describe three qualities found in Organizational Innovation illustrated by the development of the Computer Industry.
The most important qualities of organizational innovation include having a relevant yet unique strategy. Once the strategy has been laid down clearly, the organization then follows up the strategies to the consistently till they yield fruits (Hage, 1998). Secondly, the organizations that are innovative use innovations just to achieve their long term goals unlike just making them the end. Lastly innovative organizations have the zeal to implement ideas and make them work.
24. How did the issue of regulation relate to the financial crisis of 2008?
The starting point of the 2008 financial crisis occurred when housing prices were reduced. Then mortgage brokers and the same banks started offering loans to buyers who could not afford to pay them on time. Consequently, the trade transactions involving these mortgages spread the risk to the entire system thus endangering its continuity. Finally, the markets were unable to regulate themselves accordingly (Krugman, 2009). In addition, the government’s policies were insufficient in helping to make the system stable.
25. Choose either the role of government, technological innovation, and entrepreneurship and describe one example of a contribution to the development of American Capitalism
The entrepreneurs have played a huge role towards American Capitalism in many ways. America is a Capitalist economy and, therefore, it has a certain level of the endless demand. Entrepreneurs fill these demand through creating goods and services that generate profits. For instance, teachers cannot exist without the students and vice versa. (Steele, 2004)
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